Solitron Devices Reports Mixed Financial Results for Third Quarter and Nine Months Ended November 30, 2024

Solitron Devices, Inc. reported its financial results for the three and nine months ended November 30, 2024, revealing a mixed performance compared to the same periods in the previous fiscal year. For the third quarter, net sales decreased by 19% to $3,369,000, down from $4,136,000 in the prior year. The decline was attributed to a lower backlog at the beginning of the quarter and delays in expected orders. However, net bookings for the same period increased significantly by 66% to $8,049,000, indicating a positive trend in order acquisition. For the nine-month period, net sales rose by 25% to $10,917,000, driven primarily by the acquisition of Micro Engineering Inc. (MEI) in September 2023.

The company's cost of sales for the third quarter also decreased to $2,368,000 from $3,059,000, resulting in a gross profit of $1,001,000, slightly down from $1,077,000 a year earlier. Despite the drop in gross profit, gross margins improved to 30% from 26%, reflecting better cost management. Selling, general, and administrative expenses decreased to $675,000 from $859,000, contributing to an increase in operating income to $326,000, compared to $218,000 in the same quarter last year. For the nine-month period, operating income rose to $1,168,000 from $566,000, again largely due to the MEI acquisition.

Solitron's net income for the third quarter increased to $266,000, up from $86,000 in the prior year, while for the nine months, net income reached $872,000 compared to $115,000. The increase in profitability was attributed to the successful integration of MEI and improved operational efficiencies. The company also reported a significant increase in cash and cash equivalents, which rose to $3,727,000 as of November 30, 2024, from $2,217,000 at the end of February 2024.

Operationally, Solitron shipped 13,675 units in the third quarter, down from 20,733 units in the same period last year. The company’s backlog as of November 30, 2024, decreased by 5% to $12,277,000 compared to $12,986,000 a year earlier. The acquisition of MEI is expected to enhance Solitron's capabilities in addressing design and manufacturing challenges, particularly in low to mid-volume projects, which may contribute to future growth.

Looking ahead, Solitron anticipates that its cash from operations and available cash will be sufficient to meet its capital expenditure needs over the next twelve months, estimated at approximately $250,000. The company remains focused on leveraging its recent acquisition to expand its product offerings and market presence, while also considering additional share repurchases under its stock repurchase program, subject to market conditions.